Non-Traditional TP Methods

AFM Definition, Scope & Accounting Standards including Ind AS Free JAIIB Capsule 26 views Updated
Capsule FREE
AFM · Definition, Scope & Accounting Standards including Ind AS
Name two non-traditional methods available for determining the arm's length price in transfer pricing.
Tap to flip and reveal the answer
The Profit Split (PS) method and the Transactional Net Margin Method (TNMM).
PS is used when businesses are highly integrated, splitting ultimate profit. TNMM examines net profit margin relative to an appropriate base.
26 views

Non-Traditional TP Methods — Full Text

Name two non-traditional methods available for determining the arm's length price in transfer pricing.

Answer

The Profit Split (PS) method and the Transactional Net Margin Method (TNMM).

Additional notes

PS is used when businesses are highly integrated, splitting ultimate profit. TNMM examines net profit margin relative to an appropriate base.

Part of Accounting & Financial Management for Bankers · Definition, Scope & Accounting Standards including Ind AS · Last updated

Comments (0)

Login to post a comment.

No comments yet. Start the discussion!

Related JAIIB AFM Capsules

Capsule PRO
When an organization runs a specific safety drive or a middle-management training course, what type of budget is used?
Programme Budgeting. It is prepared for a specific activity or program, detailing targets, revenues, and expenditures for that event only.
Capsule PRO
What is the composition and primary role of the Budget Committee in a large firm?
Composed of representatives from various departments, it coordinates, finalizes, and assumes overall responsibility for the master budget.
Capsule PRO
In the context of implementing budgetary control, what constitutes a 'Budget Centre'?
It is a specific section of the organization with clearly defined functions, for which a separate budget is prepared and controlled.
Capsule FREE
What is the most widely accepted definition of Accounting given by the American Institute of Certified Public Accountants (AICPA)?
It is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions of a financial character.
Capsule PRO
What is the purpose of the 'Budget Manual' distributed within a company?
It is a rulebook detailing instructions, guidelines, responsibilities, and timelines for preparing and using budgets across the organization.
Capsule PRO
How does a financial budget conceptually differ from a simple financial forecast?
A forecast is an assessment of probable future events. A budget is a planned operating and financial goal that implies commitment to achieve it.
App Icon
Install ClearShorts App
Study offline, anytime